Business over Tapas 29 June 2017 Nº 215

In the eighties, a bumper-sticker plastered on the back of a number of vehicles in the USA’s most intriguing state would read ‘Welcome to California, Now Go Home’. Behind the wheel of the old rust-bucket bought from a dealer in Detroit (where else?), This Writer felt a bit of an interloper driving around The Golden State with his travellers cheques, his snappy British accent and his half-empty jar of Ovaltine.

Tourism may not have been in those days such a Big Thing in California, despite the popular song from Supertramp (here ya go) and the steady arrival of farmers from the Dust Belt looking for a decent job; but, at 12% of GDP (here), it’s certainly a Big Thing in Spain. Last year, around twice as many foreign tourists visited this country as there are Spaniards living here. And, if that was not enough – two people in lederhosen, or perhaps sticky ‘Gibraltar is British’ tee-shirts – for every single Spaniard, you can add the huge numbers of displaced Spaniards themselves – everyone has a right to a vacación – flocking to the same destinations.

Those resorts will have put up the flags, organised a fiesta and will be ready for the onslaught. Shops full of glitter, bars with cold beer and restaurants with fresh fish. The late night joints will be buzzing and the cops will be on every corner, nervously fingering their books of fines. A loud midnight buzz of people, fun, parties, botellones, noise, fire-crackers, sirens, arguments, screams, music, songs and the burble and bang from those irritating Harley Davidsons... The following morning, there’s the rubbish to clean up.

Money is made, vast amounts of money for the shop-keepers, the apartment owners, the barkeeps, the municipality itself – but that’s no consolation for the normal folk, those who live there year round, working in ordinary jobs or retired, who must somehow get through their day: past the jams, the queues, the noise. The drunks and the dust.

The town fiesta: costumes and spectacle, paid with our taxes, is so full of visitors, that there’s no parking, no room, no welcome for the locals, who with resignation decide to stay home. ‘We’ll go next year’ they say.

The apartment block: with half of the flats rented out, a two-bed apartment with twelve people staying there, filling the pool for a late-night dip, uprooting the flower bed and being sick in the lift.

So now we have a new word: la turismofobia. And we read the headlines, particularly about Barcelona and Madrid, Granada and Palma, where the cities are taken over by the tourist hoards. This is a fabulous country and there are few better places to live; but on the car, there’s a new sticker. It reads: ‘Welcome to Spain. Now Go Home’.

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Housing:

El Independiente faces the disappearance of Spain’s interior puebloshere. Some 4,000 municipalities – around half of the entire country – are at risk of fading to nothing, says the article here. Living in those municipalities are just 15.6% of the population (that’s in 52% of the national territory).

Meanwhile, demand for homes is rising in certain areas. The Olive Presssays that the ‘Average property prices rise by 25% in the southwest of Mallorca since 2016’ with ‘...average prices in the area now at €2.11 million, up from €1.68 million in 2016...’. Mark Stücklin at Spanish Property Insight also has some surprising numbers. Quoting Tinsa, he writes that ‘The municipalities where house prices – mainly second homes – are rising the fastest are Antigua in Fuerteventura, part of the Canaries archipelago (+26%), Gavá just south of Barcelona (+18%), and Mojácar in Andalucía’s Almeria province (17%). Other areas where Tinsa find the holiday home market is “clearly recovering” include most of the Canary Islands, Mallorca, Ibiza, the Costa Dorada, the South Costa Blanca (Alicante province), the West Costa del Sol (Málaga province), and the Costa de la Luz (Cádiz province) between Tarifa and Conil...’.

‘Rental asking prices are increasing fast across many parts of Spain, particularly in hot markets like Barcelona and the Balearics; an attractive proposition for property investors.

Rental asking prices in Spain increased 8.8% on average over three months to the end of March, according to the latest figures from Idealista.com. The Spanish property portal found that the average rental asking price was almost €9sqm (£7.90) per month at the end of March, based on more than 56,000 rental listings in the portal’s database. Rents are highest in Barcelona, where landlords ask €18sqm (£15.90) a month, followed by Madrid €15sqm (£13.20) per month...’. Report fromProperty Investor Today.

From Digital Journal: ‘What Documentation to Request to the Vendor to Purchase an Already Existing Property in Spain’. Here.

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Tourism:

‘All of Spain’s leading newspapers coincided this past weekend in dedicating part of their covers to the tourist saturation and turismofobia, thus giving the situation the rank of a matter of State: fruit of the "monopoly" that Spain enjoys as a safe destination both in cities and on the beaches...’ following the instability of other destinations. Preferente considers ‘quality’ over ‘quantity’ (they mean wealthy tourism) and other solutions here. The subject of wealthy tourism is also reverently considered by Cinco Díashere.

El Mundo has an article called ‘It’s not tourism, this is invasion’. We are in Barcelona where ‘30 million tourists encounter 1.6 million inhabitants’. In front of Gaudí’s unfinished cathedral, ‘...the list of shops in order of appearance that populate Provença Street, which faces the east façade of the Sagrada Familia: a Kentucky Fried Chicken, a Burger King, an ice cream parlour, a McDonald's, a Costa Coffee - where a cortado costs 1.85 euros, a nougat shop, another ice cream shop, a Gino's pizzeria, a souvenir shop and a cashier from La Caixa to finance such a copious menu...’.

‘Relations between the ultimate disruptor of global tourism, Airbnb, and Barcelona City Council just took another turn for the worse following news that organized criminals from Russia are making massive profits by subletting apartments in Barcelona to tourists through the online site. For the San Francisco-based company, any further damage to its Barcelona market could be very costly. With over 23,000 registered dwellings, the city is far and away the most important Spanish destination for the platform’s users and the sixth biggest in the world, behind Paris (1), London (2), New York (3), Rio (4) and Los Angeles (5), five cities that are significantly larger than Barcelona...’. Wolf Street always entertains here.

A fine of 2.6 million euros has been served on a group that supplies cleaners to hotels in Seville. The group, Externa Team, has neglected to pay social security on 275 cleaners since 2013 claiming that they were ‘trainees’. El País has the story here.

FromThe Olive Press on Marbella ‘loutish’ tourism: ‘ ...In the meantime the Town Hall decided it would get tough and issued a decree that public drunkenness, anti social behaviour and not wearing a top would be punishable by fines...’.

New rules in building ‘communities’ would allow the prohibition of tourist rentals in the complex, says El Mundohere.

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Seniors:

The CEOMA – the Confederación Española de Organizaciones de Mayores – is a useful organisation (here). They put out their own magazine and research, and have travel programs (such as Silver Cyclist and Senior Train).

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Finance:

Buying a new car? The Government has introduced the Plan Movea which supposes a hefty discount on hybrid and electric vehicles. Details are here.

The annual list of those owing over a million euros to Hacienda has been published. 4,500 contributors owe, between them, 15,400 million euros. The full list of transgressors, including a man called Agapito García who owes 17,030,000€ in taxes, is at El Paíshere.

El Independiente lists five major AVE constructions which, while completed, are now obsolete. These include the giant 28 km tunnel near Sorbas in Almería, mothballed after spending 800 million euros. More here.

FromEl País, a study says that ‘Brexit will not affect British tourism in Spain, but it is affecting trade relations. A year after the referendum, a study by the Bank of Spain detects negative effects on Spanish exports to the United Kingdom but not on tourist visits’. The paper notes that: ‘...Prior to the referendum, sales from Spain to the United Kingdom had grown by 10.4% in 2015 and by 11.3% in the first half of 2016, comfortably above the 6.4% and 5.7% export rates to the EU as a whole. Following the Brexit vote last year, this trend has reversed: exports to the United Kingdom recorded a decline of -1.1% in the second half of 2016 and a growth of just 2.5% in the first four months of 2017. In contrast, sales to the EU were down by -0.9% in the second half of 2016 and up by 8.8% between January and April 2017...’.

The public bank Bankia is to absorb Banco Mare Nostrum, says Reuters on Monday here. More details on the new Bankiapostfusión at El Diariohere.

‘Unicaja to be listed on the Spanish stock market on Friday 30 June. The bank is to issue up to 687.5 million new shares, at an expected price of between 1.10 and1.40 euros, to be confirmed on 28 June...’. The story at Sur in Englishhere.

New autonomo / Self Employed Law 2017 – A Summary: Citizens Advice Bureau has a pdf file in English here.

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Politics:

King Juan Carlos I was ‘not amused’ to find he had not received an invitation to the act of commemoration of the fortieth anniversary of the first democratic elections, held on Wednesday in the Spanish parliament, the Cortes. El Mundo reports here.

‘The PSOE has directly accused Mariano Rajoy of being "from the beginning to the end" behind the illegal financing of the PP. It has done so through the mouth of the party spokesman in the parliamentary committee that investigates the alleged black-account of the Popular Party which began on Monday with its first session with the former treasurer Luis Bárcenas answering questions. Bárcenas however declared at the beginning of the hearing his intention not to respond to the questions of the deputies, relying on the law to remain silent in order not to prejudice one’s own right to defence before the courts. The Socialist deputy Isabel Rodriguez has linked Bárcenas's silence as evidence of the alleged "pact of silence" that the former treasurer would have reached with the PP headquarters in the Calle Genoa in order not to harm the party's leaders, particularly President Rajoy...’. El Mundo has the story here. El Huff Post also covers the story with the headline ‘Bárcenas: What am I meant to be apologising for?’ (with video).

‘Pablo Iglesias: "They are saying things that sound good. I am optimistic"’. From Público here. ‘After meeting with Pedro Sánchez for the first time in fifteen months, the leader of Podemos is pleased by the better understanding with the socialist general secretary. Iglesias says that the teams from both parties, led by Margarita Robles and Irene Montero, the PSOE and Unidos Podemos parliamentary spokespersons, are expected to start working in July to study new increases in the minimum wage, to talk about the spending ceiling for 2018 and a reform in collective bargaining. Iglesias says the main objective of this alliance is "to put together an alternative" that will translate into the "eviction" of the PP from government, and affirms that he will try to convince Sánchez of the importance of a new vote of confidence...’.

‘Las Cloacas del Interior’: ‘Bad practice and corruption in the Ministry of Interior from the recordings between the ex-Minister for the interior Jorge Fernández Díaz and Daniel de Alfonso as revealed by Público in June 2016. With exclusive testimony of two commissars and a sergeant of the Guardia Civil, The film (this is the trailer on YouTube) reveals a network of interests and corruption that goes beyond the persecution of political enemies, which is a pattern of favouritism and corruption involving police, judges, prosecutors and entrepreneurs: a structure within the state that offers its services to the most powerful. The documentary also reviews bad practices in the Ministry of Interior since the beginning of the transition’. Felipe González is said to have once stated that ‘The Rule of Law must also be defended in the sewers’... The 80 minute documentary was shown in a Barcelona cinema on Wednesday night.

An interview with the notorious ex-commissioner José Manuel Villarejo on Salvados (La Sexta) discussing the machinations of the Secret Service and the Ministry of the Interior was shown on TV last Sunday. Guerra Eterna comments here. Jordi Évole discusses the program in an interview here.

A paper from the Royal Institute El Cano: ‘Spain: reasons behind the prolonged absence of anti-European and xenophobic views’.

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Corruption:

‘Here’s how the great cases of corruption investigated by Judge Mercedes Ayala are tumbling down to dust’, says El Confidencialhere. Between ever longer inquiries, breaking up cases into what should have been smaller lumps, changes in the law, changes in the judges, absolutions, dis-coordination, administrative fines and illness. Charles Dickens would have approved.

Football Fraud. Other tax cheats in the world of the First Division are becoming known to the public. El Confidencial mentions names, including the agent Jorge Mendes, here. Leo Messi, meanwhile, has had his jail sentence ‘suspended’ after accepting a fine instead (From El Paíshere).

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Catalonia:

The best thing would be to have a referendum... and lose, says The New York Timeshere. The article receives attention from El Paíshere.

From the London School of Economics: ‘The Catalan government has announced plans to hold a referendum on independence from Spain on 1 October. However, the Spanish government has argued that such a referendum would be unconstitutional and it is still unclear whether the vote will take place. We asked four academics to give their views on whether the vote should be held, and what it would potentially mean for Catalonia and Spain...’. Read what they say here.

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Brexit:

FromBuzzfeed News: ‘British citizens living in the EU say they are frustrated by proposals put forward in a paper by Theresa May on Monday to guarantee their rights and are urging the government to do much more to protect those living and working in Europe. “Apart from the fact that paper makes very few detailed mentions of UK citizens in Europe – even though we represent by far the largest national group of people who will be impacted by the citizens' rights deal – the government strategy is clearly putting our future rights at risk," said Jane Golding, chair of British in Europe, the largest coalition group of British citizens living and working in Europe...’. A similar story from The Guardian here: ‘EU expats condemn Theresa May's 'pathetic' offer on Brexit rights. Groups representing EU citizens in UK and Britons abroad unimpressed by prime minister’s Brussels proposal’. ‘British citizens living in EU fear they will become May's 'sacrificial lambs'. Campaign groups for Britons living abroad urge UK government to reciprocate EU proposals that would maintain status quo’ (The Guardianagain). The Local brings better news: ‘The UK Prime Minister Theresa May laid out the country's post-Brexit offer to EU nationals living in the UK on Monday, but also made some key pledges that may ease the worries of the tens of thousands of British expats in Spain’. Sue Wilson of Bremain in Spain comments on Theresa May’s opening offer to the EU re Citizens’ Rights here.

...and for the EU citizens living in the UK:

The Huff Post outlines the plans here: Theresa May has set out her plans for EU citizens living in the UK after Brexit. The proposals are key part of the Brexit talks between the UK and Brussels, and will try to reassure the estimated 3.2million EU nationals in Britain their rights will be protected. FromThe Independent: ‘EU nationals who filled in 85-page form to secure post-Brexit UK residency will have to apply again. Home Office document adds little to outline proposals set out by Theresa May last week - and rejected by the EU’.

El País is wary of the British offer. An article called ‘Third Class Citizens’ carries the stub: ‘If this Brexit triumphs, both Britons in Spain and Europeans in the UK will lose rights’.

London has included territory in a policy paper outlining citizens’ rights after departure from EU. The explicit mention of Gibraltar in a British document detailing the rights to be enjoyed by EU citizens in Britain and Brits living in the EU could place the long-running dispute between Spain and the UK over the small overseas territory high on the agenda at the start of Brexit negotiations...’.

Brexit is bad for business, says El Mundo in a piece here. Almost half of qualified EU workers will leave the UK in the next five years, says El Diariohere.

The story so far: ‘The United Kingdom’s Exit from the European Union. Safeguarding the Position of EU Citizens Living in the UK and UK Nationals Living in the EU’ A pdf file from HM Government.

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Various:

2016. For the second year running, more Spaniards have died than have been born. Here.

‘With its soaring Roman columns, exquisite Moorish mosaics and a minaret encased in a Renaissance bell tower, the Mosque-Cathedral of the Spanish city of Cordoba has long been lauded as a unique architectural symbol of the meeting of East and West. But for years, the UNESCO World Heritage site has been at the centre of a fierce ownership battle, pitting the Catholic Church against an alliance of Muslim groups, secularists, and Left-wing politicians who insist it should belong not to the clergy, but to the people...’. More at The Telegraph.

‘Catalonia regulates the cultivation, consumption and transport of cannabis. This is a pioneering norm in Europe because it establishes all the rules so that a crop will not be confiscated by the Police...’. El Huff Postnotes that the new rule is approved by all parties except the PP (including the appropriately named Catalunya Sí que es Pot).

FromTypically Spanish: ‘The tiger mosquito has taken root in Murcia. The insect was first detected in the region in 2010 and originated in SE Asia and since then its population, a carrier of numerous illnesses, has been expanding along the Mediterranean coastline...’.

FromEl País in English: ‘Did Hitler plan a coup in the Canary Islands during World War II? Declassified documents show British concerns about Spanish archipelago falling under Nazi control’. What, and they haven’t made a film yet?

An interesting video about the Spanish arms industry in the First World War here.

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See Spain:

‘In Surreal News, Salvador Dalí’s Body Will Be Exhumed For A Paternity Test. An astrologist and psychic believes the artist had an affair with her mother in 1955...’. The story at The Huff Posthere.

‘Two great hull-like forms stand on the seafront in Santander, northern Spain, clad in thousands of pearlescent discs, like a pair of ships encrusted with exotic barnacles.

Jacked up 6 metres into the air on slender white pillars, allowing views through to the water, this is the new Centro Botín, an €80m art gallery by Renzo Piano, which opened to the public on Friday...’. From The Guardianhere.

FromEl País in English: ‘Cuban-American millionaire to donate art treasure trove to Spain. US collector Roberto Polo to hand over 7,000 contemporary artworks to two Spanish museums. The collection of modern and contemporary art belonging to multimillionaire Roberto Polo is to find a new home in two locations in Spain. From summer 2018, part of the art historian’s treasure trove of more than 7,000 paintings, sculptures and photographs will go on show at Toledo’s 13th-century Convento de Santa Fe, with other work to be displayed at the former public records building in Cuenca – also a former headquarters of the Spanish Inquisition...’.

Business over Tapas 29 June 2017 Nº 215

A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners: